Correlation Between Elbit Systems and Delek
Can any of the company-specific risk be diversified away by investing in both Elbit Systems and Delek at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Elbit Systems and Delek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Systems and Delek Group, you can compare the effects of market volatilities on Elbit Systems and Delek and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Elbit Systems with a short position of Delek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Systems and Delek.
Diversification Opportunities for Elbit Systems and Delek
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Elbit and Delek is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Systems and Delek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Group and Elbit Systems is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Elbit Systems are associated (or correlated) with Delek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Group has no effect on the direction of Elbit Systems i.e., Elbit Systems and Delek go up and down completely randomly.
Pair Corralation between Elbit Systems and Delek
Assuming the 90 days trading horizon Elbit Systems is expected to generate 1.08 times more return on investment than Delek. However, Elbit Systems is 1.08 times more volatile than Delek Group. It trades about 0.25 of its potential returns per unit of risk. Delek Group is currently generating about 0.25 per unit of risk. If you would invest 7,313,263 in Elbit Systems on September 15, 2024 and sell it today you would earn a total of 1,738,737 from holding Elbit Systems or generate 23.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Elbit Systems vs. Delek Group
Performance |
Timeline |
Elbit Systems |
Delek Group |
Elbit Systems and Delek Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Elbit Systems and Delek
The main advantage of trading using opposite Elbit Systems and Delek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Systems position performs unexpectedly, Delek can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Delek will offset losses from the drop in Delek's long position.Elbit Systems vs. Nice | Elbit Systems vs. Bank Leumi Le Israel | Elbit Systems vs. Teva Pharmaceutical Industries | Elbit Systems vs. Bank Hapoalim |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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